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I think the ONS published that average hoisehold income for a family was £65k
That is a good point, I suppose household income is the thing. Still, I do get the impression that most cars on the road are pretty new compared to a few years ago. That's just my perception though, I've no idea whether it is actually the case or not.
Until my early 30's, shit jobs and going out on the lash a lot meant no savings.
Until early 40's, house ownership and losing money on the sale of the house meant no savings and credit card debt!
Now I'm 45 I have enough savings to last about a year without a job.
When I had no savings I was not worried at all, now I have savings I wonder if I have enough 😕
That's a clear indication of how statistics like national average wage are not understood. I think the ONS published that average hoisehold income for a family was £65k
where do you get that from? That's well over 2x the average wage
This ONS report suggests that 65K would put you somewhere in the top 10 - 15% of households (in 2013/14).
Then again it also suggests that the average household income is somewhere close to the average wage. I'm not sure how to square that - does that seem likely? Statisticians?
Households and families are different?
Cars. I am surpised at the number of new cars particularly given the headline prices. The "magic" of manufacturer finance I suppose, buyers look just at the monthly payments and the car manufacturer borrows the money to allow them to buy the car.
@doris I'll have to look it up, explanation something like relateively better off couples start families and also tye average wage includes many working part time or in "temporary" jobs so its lower than it should be. Also a good example of average vs median statistics.
Cars are mental.
We bought our 55 reg Verso three years ago for just over £2k. If we scrapped it now it would have cost us £2 a day in 'depreciation'; can't believe some people pay hundreds a month.
Still, I do get the impression that most cars on the road are pretty new compared to a few years ago. That's just my perception though, I've no idea whether it is actually the case or not.
I think that PCP finance means that newer cars are in reach of many more households. For example, if you look around you could probably get a Golf GTi for £250 a month but to buy the same car outright it would cost you around £420 a month over five years.
Got enough stashed for a 4 year break from work
mtg paid off and I live a frugal lifestyle , most importantly I am single and child free.
I am lucky , and I have inherited a few 4 figure amounts , but mostly its saved up by being tight. I have never earnt enough to pay 40% tax.
Reduces the dedication to the job somewhat though.
I've just remortgaged, **** it I'm going out spending and having a good time
£100 isn't a fat lot to get anyone out of a sticky patch is it.
It's pretty easy to get 6% + on savings, so it is definitely worthwhile.
I have 3 months salary and over pay my mortgage each month. I could not sleep with any debt hanging over my head. I earn less than the national average with two kids so it is possible to save if you live frugally
Worked and saved hard when we could, mortgage paid off and 3-4 months salary in savings just in case. We've been lucky to be able to do all that with two kids and one of us working part time for 13 years, but we don't have expensive holidays, bling watches or Maseratis, so swings and roundabouts.
Please don't read the BBC online news output.
Yeah got a fair bit in cash savings and more in share save schemes with work.
The cash savings are earning **** all in interest. I need to find better accounts.
Having said that though even if they are earning nothing at least i have a cushion
£100 isn't a fat lot to get anyone out of a sticky patch is it.
No absolutely not. I do think people in 2016 live only for today with little thought of the future and/or a view someone else (eg state) will bail them out. When my parents where raising us credit cards didn't exist for ordinary people.
It's pretty easy to get 6% + on savings
It is? Where?
There's a lot of strings attached to that 6%! Limited deposit regular saver, that's 6% on not a lot.
Can well believe the article. I volunteer as a money coach for a charity Christians against Poverty and we help people to budget, save so that they can spend. We encourage people to have three accounts, one for direct debits; one cash account, and then a savings account. Living on cash does seem counter cultural but those on the course have found that it's really helped in terms of increasing saving levels. The more worrying statistic is the percentage of people who have felt suicidal due to debt.
Forgive me but my opinion is that those who have less than £100 in savings must be young'ish and brought up during Tony Blairs Credit Bonanza, and they've just gotten used to obtaining 0% interest Credit Cards and used to living in debt.
It'll change drastically 18mths post Brexit, but then those folk will all be a little older, and far worse off, without safety nets to enable them to cope with the debt.
Terrible whirlwind debt.
I don't have any savings beyond what I'm putting away in case the boiler dies.
Up until November 2014, I had almost £90k, but the house deposit and stamp duty took all of that and then some. I can start saving again in January.
If I'm honest, it does bother me...not sleepless nights or anything, but having had savings and no debt and now having no savings AND debt...it preys on my mind a little.
Currently like to keep at least 1 month's wages in the savings pot, currently at 2. Which considering the amount of debt I was in 10 years ago is amazing!!
I was one of those people living beyond their means with easy credit thrown at me. By the time I was 25 it was just under £40k in unsecured loans and credit cards (no flash car). Realised it was all a bad idea when my wages didn't hit my bank account one month and all my bills bounced - I set them all up to go out at the beginning of the month. It was down to a computer error and all the charges were refunded but I was more than penniless for nearly three days. Sat down that weekend to work out the figures and re-arranged everything over the next fortnight. Sold a load of computer stuff, the big TV and a few other bits, cut out all my subscriptions to the gym, magazines, DVD rental etc and massively scaled back my social life. Looked for a better paying job and was debt-free in May 2012, that's £46k paid back including interest in 7 years. Would have been a year earlier but I treated myself to a new bike after I'd cleared everything down to £5k. Spent a year getting some savings together then my car failed it's MOT badly so had to buy a new one. Thankfully I'd had a PPI payout from all my earlier credit binge so I had enough to buy a new car in cash. It's a strange feeling knowing everything I own is paid for!
I try not to think about what type of house I could now be paying the mortgage on with all that wasted money as a deposit 😥 , still stuck renting. I worked it out as over the 10 years I'd borrowed £35k in cash into my account and with the interest I paid back nearly £50k 😯
It's pretty easy to get 6% + on savings,
Really? Where?
6% return is pretty conservative for a stocks shares isa - point is it makes sense to save not borrow!
Mates keep adding 1000s to their 40 year mortgages for non essential upgrades seems crazy to me.
Milky1980 thats a very impressive turnaround.
There is someoneun particular i know who is always skint, never has any money, cant afford to do anything, unless someone is going on the piss and then all of a sudden he can find some. Whenever he does find some cash instead of paying down a credit card or something he immediately blows it on something stupid. Its as if he cant bear to have ajy cash lying around, or any unused credit card limit. He has a very well paid job as well, and just lives in a shitty rented one bed flat in fair grim area. Bizarre.
100 quid isnt much is it, wouldn't even out a tyre on the bus.
That's investing, not saving, and it is not without risks.6% return is pretty conservative for a stocks shares isa
Saving is generally seen as sticking your pot away somewhere "safe".
I had to grab pretty much all the overtime I could do, 60 hr weeks for two years made a massive dent in it! I now only work 4 days a week and am happier than I ever was with credit to burn all those years ago. Never going back to that situation again.
I should be proud of what I achieved but then I should never have been in that situation in the first place.
mudshark - Member
I find this surprising and scary:
what's so scary about it?
I think if like me you've borrowed money in the past or got into debt, you learn just how difficult it is and how long it takes to pay back the money......and then decide to avoid that situation ever again!
For the past 20 years I've had a serious aversion to any non mortgage debt and if I can't afford something, I don't buy it.
I should be proud of what I achieved but then I should never have been in that situation in the first place.
Everyone ***** up from time to time, the loan companies make the deal sound like the most normal thing in the world and at a young and without the life experience to know the flip side of the deal it very easy to be dragged in. You should definitely be proud of dragging yourself back out.
Yes, but some people had to die to get me there...
I worked at a big Citizens Advice Bureau, typing '000s of letters about people's affairs during the early 2000s - while I was at uni. I later became a member of the trustee board there for 6 years.
Just typing those letters taught me a huge amount about life and how things can go wrong. Life is sometimes precarious and painful for people; often things change quickly and - when it comes to money - it can be unexpected or small events or sums that tip a balance.
To lend a recent story to this: a close friend recently suffered a major trauma and is going through neuro rehab, but with very slim chance of regaining a "normal" life. With that, goes the potential to support his wife and family - who will now have to care for him. I know that they have a large interest-free mortgage, so his wife and 2 kids will have a big challenge ahead. Not what they expected at the age of 35... 🙁
I am concerned that, in addition to personal changes in circumstance, wider economic changes will one day bite a debt-normalised society hard. Money is very cheap at the moment (since 2008) and it's hard to see how this would continue for ever.
From the age of 26 (10 years ago), I've followed the advice of my now father-in-law when it comes to savings.
I don't want to share personal details on a public forum, but I will say that compound interest works both ways. I intend to stay on the savings rather than debt side of that.
Phew, I got a £105.
I don't understand this 'it's not worth saving cos interest rates are so low' - it's utterly foolish... you save so you have some cash aside for emergencies or so you can eat if you lose your job - you don't save so you can earn interest!
In the days when banking worked properly, you were given interest to encourage you to save, as it was those deposits that the bank then gave out as loans and mortgages - which happily prevented banks lending out too much - so back then houses were affordable, we weren't in a debt crisis and we lived within our means and steady economic growth was a realistic expectation... but we decided against that and decided a debt binge on shiny stuff was a better idea!
The big problem with bailing the banks out in 2008 was that it bailed us out too - not calling in all the debts, and keeping interest rates on the floor to stop mass bankruptcies has saved us from our own foolish behaviour and we've just carried on getting into more debt.
As and when the next recession hits (which it will soon enough, they're a regular feature of capitalism) and people lose their jobs I really dread to think how people will cope - if people don't have £100 and they lose their jobs then they'll be unable to pay for food within a couple of weeks...hard to see how we're going to get ourselves out of this mess...
I don't understand this 'it's not worth saving cos interest rates are so low' - it's utterly foolish... you save so you have some cash aside for emergencies or so you can eat if you lose your job - you don't save so you can earn interest!
In the days when banking worked properly, you were given interest to encourage you to save, as it was those deposits that the bank then gave out as loans and mortgages - which happily prevented banks lending out too much - so back then houses were affordable, we weren't in a debt crisis and we lived within our means and steady economic growth was a realistic expectation... but we decided against that and decided a debt binge on shiny stuff was a better idea!
The big problem with bailing the banks out in 2008 was that it bailed us out too - not calling in all the debts, and keeping interest rates on the floor to stop mass bankruptcies has saved us from our own foolish behaviour and we've just carried on getting into more debt.
As and when the next recession hits (which it will soon enough, they're a regular feature of capitalism) and people lose their jobs I really dread to think how people will cope - if people don't have £100 and they lose their jobs then they'll be unable to pay for food within a couple of weeks...hard to see how we're going to get ourselves out of this mess...
I used to have £10 left every month (after deducting fixed expenses) as saving many years ago. It was hard. Very hard.
As and when the next recession hits (which it will soon enough, they're a regular feature of capitalism) and people lose their jobs I really dread to think how people will cope - if people don't have £100 and they lose their jobs then they'll be unable to pay for food within a couple of weeks..
Locally during the current oil downturn we got folks turning up to food banks in porsche panameras..........
"I know people with terrifying mortgages at our age, a £40k car on PCP on the drive and loaded credit cards......"
There's a new estate that's been built on the outskirts of our village. It's a very typical new build estate with houses priced between £250-450k. Outside nearly every house is a new Evoke, Discovery Sport, BMW, etc and they're there during working hours so not company cars.
It's absolutely frightening what people are prepared to borrow.
Mates keep adding 1000s to their 40 year mortgages for non essential upgrades seems crazy to me.
This.
My mortgage will be done in 5 years, when I'm 46. I've been overpaying for a number of years now, also sunk a big chunk of my voluntary redundancy into it. Once that's done. I'll be the best part of a grand a month richer, just in time for the wee yin to be doing her exams, so I'll need it for student digs shortly thereafter.
I must look into these 6% ISA's, as at the moment my savings are wallowing in a pishy RBS savings account. Would be as well having it under the mattress.
deleted post
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts
I'm familiar with the various regular savings accounts (I've got 3 on the go at the moment) and while you're correct that it's 6%, you get that rate for a whole year only on the first month's deposit. Plus it's only open to people holding other accounts (which won't be 6%) with the provider. They're worth doing though, and if you're short of income to put aside but have an existing Cash ISA it's worth plundering that to feed them, then plonking the money back when they finish.
This is another interesting article - not a surprise I think though
[url= http://www.bbc.co.uk/news/business-37508968 ]Wealth of people in their 30s has 'halved in a decade'[/url]
Mates keep adding 1000s to their 40 year mortgages for non essential upgrades seems crazy to me.
Assuming we're talking house upgrades, it's probably not as daft as you make out.
I'm 30, we bought our house last year and have a 27 year mortgage in the order of about £370k.
The odds of me still living in this house when I reach retirement are vanishingly small, the odds of me spending my retirement here are smaller still.
Which means the size of the mortgage remaining when I come to sell it (in lets say 10-15 years) is irrelevant as long as the repayments are affordable. The only number that matters is the equity, which would likley determine the size of the next house if I wanted a smaller/no mortgage to be able to spend more time with any kids we have.
So, in a couple of years and a few pay rises time I could either
1) Overpay the existing mortgage and bring the balance down and increase my equity by that amount + interest.
2) Do nothing, just let the repayments be effectively diminished by inflation.
3) Re-mortgage with MORE debt, spend £20k on a flash extension and add £40/60/80k to the value of the house.
Even if I don't want 6 bedrooms and 3 bathrooms, and I quite like the big garden, financially in my position it makes far more sense to spend money on the house getting multiples of what I spend back in equity than it does on the mortgage getting a few percent.
I guess non-essential upgrades means nice bathrooms and kitchens - doubt they had much to value.
may increase saleability?
I hate having debt, sometimes it's a must - mortgage for, well, a house. Short term load to complete our building work.
In the above case the building work has paid off dividends, adding £2-3 for each £1 spent on the works...
I'm contemplating adding an extra £40k to our mortgage in order to add a further extension, but this will likely add only £1 per £1, as we're getting towards the 'limit for the street' so to speak...
I suppose, as long as you have a plan and a means, sometimes debt is OK.
For flash cars and bling trainers, maybe not so..
DrP